Transport Committee on April 18th, 2018

[Brock Carlton]

If you take those numbers from Quebec and project them across the country, it's the same story. I think that perhaps the professor from the University of Ottawa, with whom I get a sense that you don't really agree, which is probably a good thing.... One of the comments I would make is that the country has so underinvested in infrastructure for many years that we're catching up, if nothing else. If you look at the graph of infrastructure investments since the 1950s, there is significantly higher investment of infrastructure in the fifties and sixties, as we were tooling up to be truly an OECD and a G7 economy. Then the graph shows a significant drop that's only started to come back up in the last few years, so we're catching up.

In terms of the PBO numbers, we can't comment on the relationship of dollars to GDP activity and infrastructure dollars to GDP. We don't do that kind of stuff. What we can say is that the PBO is an important watchdog and they've highlighted an issue that we need to pay attention to. We're confident that the government will be responding to ensure that all the money gets out the door in an effective way and we'll be working very closely with the government to help them figure that out.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Through you, Madam Chair, does Pat have any comments regarding this contradiction that we're hearing in witness testimony?

[Pat Vanini]

I didn't hear the testimony, so I'm not too sure that I'm in a position to comment. I guess I would simply say that, based on all the work that we've done, through the polling that we do consistently of the municipal property taxpayers and residents, their number one issue is the quality of their infrastructure. I'm not about to tell them that there's someone else who thinks they're wrong because they travel the roads. I will tell you that the roads I travelled two weeks ago and the roads I travelled just to get to work the other day feel a lot different as a result of the storm—the bridges and the flooding that happened. We've had closed bridges. People are living this day in, day out and I think they would tell you quite readily that there is a huge need. The other two witnesses were absolutely right that we definitely have a huge backlog in Ontario.

It's going to take us a lot of money over a long period of time to make the inroad on even just health, water, and safety things. There are a lot of standards that municipal governments have to meet and they can't close their eyes to it.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Thank you to all of our witnesses. It was very helpful today to get the testimony on the record and to get some questions answered. We will suspend momentarily, while we change the witnesses at the table.

Thank you.

[The Chair, Liberal, Judy Sgro]

I'm calling the meeting back to order.

Before I continue, for the information of committee members, Angelo Iacono's brother died, and that's why he's missing. I asked the staff to send some flowers on behalf of all of us. Thank you.

Let's move on to our next witnesses. Welcome.

From the Canadian Public Works Association we have Andrew Stevenson, the President.

From the Canadian Urban Transit Association we have Jeff Mackey, Coordinator of Public Policy, and Wendy Reuter, Acting President and Chief Executive Officer.

From the Toronto Region Board of Trade we have Jan De Silva, President and Chief Executive Officer.

Mr. Stevenson, would you like to lead off?

[Andrew Stevenson, President, Canadian Public Works Association]

My name's Andrew Stevenson. I'm from Saskatchewan, and I echo the comments concerning the Humboldt tragedy. I actually live in Rosthern and knew a couple of the people who were involved.

I'm the manager of ATAP Infrastructure Management. I'm also a volunteer with the Canadian Public Works Association, and its president.

Madam Chair, committee members, fellow witnesses, ladies and gentlemen, I'm pleased to be with you this afternoon to represent the Canadian Public Works Association. Thank you for inviting us to participate in your examination of infrastructure projects and the investing in Canada plan.

By way of background, the CPWA was founded in 1986 as the national voice of the Canadian public works community from coast to coast to coast. Our nearly 2,300 members across Canada, from both public and private sectors, plan and manage roads and bridges, water and waste-water treatment facilities, traffic signals and lighting systems, parks and city buildings, snow removal, sanitation, and mass public transit services, just to name a few. They represent the backbone of Canadian communities that are sustainable, safe, and healthy places to live, work, play, and invest.

Members of the CPWA are often unseen and unheard, but we are ever-present in the lives of virtually every Canadian. When you turn on your kitchen tap and clean water comes out, that's public works. When you approach an intersection and traffic signals are safely operating, that's public works. When snow is plowed in front of your home or business, that is the public works department of your community at work.

CPWA members are also an essential part of first responder teams, in action when emergencies and natural disasters such as floods and fires occur in cities and towns across the country. The public's general perception is that emergency management is activity that occurs immediately after an event. In truth, it involves many agencies and occurs both before and after an incident. Most often, public works has long-term participation in all phases of emergency management. We maintain water supplies, including those for fire suppression; assess damage to buildings and infrastructure; clear, remove, and dispose of debris and other obstacles from public roadways; supply technical expertise and special heavy equipment; restore lifeline services to communities; manage traffic and transportation for first responders, victims, and the public; purchase and obtain supplies; manage and coordinate municipal vehicles, equipment, and manpower; and restore the infrastructure well after the initial event.

We have great interest in all things related to construction and maintenance of public infrastructure across Canada and have welcomed the government's focus on infrastructure investment to provide communities across the country with the tools they need to prosper and innovate.

The CPWA is constantly in dialogue with our members and non-members regarding the present infrastructure funding programs. We can share some of the key themes of those conversations with the committee today.

The goal of the discussion processes is twofold: to gather feedback about the current stock of ongoing processes and to gauge the capacity to undertake new projects going forward, when new funding mechanisms are finalized.

So far, we've talked to municipal representatives with populations ranging from as few as 300 to over 600,000 people. Most members we have talked to have said they have received funding for the rehabilitation, repair, and modernization of existing infrastructure under budget 2016, primarily through the clean water and waste water fund, and we have heard that the process did not present any challenges. Some communicated difficulties obtaining project approvals under the funding program guidelines, engaging qualified consultants and contractors, and/or obtaining competitive bids from consultants and contractors.

Most members we talked to also indicated they had received funding through the investing in Canada plan under budget 2017, primarily through the gas tax fund. These members indicated the process did not present large challenges. A number of smaller municipalities said their municipality's projects had not been prioritized by the province or other funding streams because they fell outside the investing in Canada plan's five key focus areas. A few members from very small communities said they do not have current estimates of their infrastructure funding needs. One small community indicated it is unable to contribute the cost for the municipal project.

CPWA has long highlighted the need for consistent, predictable funding of infrastructure. We know that municipal resources can vary significantly between communities and that smaller and remote communities can face challenges in terms of the capacity to plan for and deliver infrastructure projects and services, particularly when regional levels of funding are uncertain or change from year to year. The expectations of residents for the delivery of services, however, is virtually the same in every community.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Stevenson.

Perhaps your closing remarks could be somehow shared in your answers to some questions here, so that we can stay on track.

[Andrew Stevenson]

Thank you.

[The Chair, Liberal, Judy Sgro]

Ms. Reuter.

[Wendy Reuter, Acting President and Chief Executive Officer, Canadian Urban Transit Association]

Bonjour. Distinguished members of the committee and Madam Chair, thank you for inviting me here today.

My name is Wendy Reuter. I'm the Acting President and CEO of the Canadian Urban Transit Association, or CUTA. CUTA is the collective voice for urban mobility in Canada. Our members include both small and large transit systems, transit manufacturers, suppliers, operators, and other stakeholders related to the urban mobility industry. In total we have 500 members representing 98% of Canadian transit operations.

Over the last 12 years, CUTA has seen the federal role in transit investment mature greatly. The federal government first came to the table for transit investment through the establishment of a dedicated transit fund in 2005. The trend to invest federally continued through the new building Canada plan, and today we have the current government's comprehensive investing in Canada plan.

Consecutive governments have decided to invest in transit because, as the population has grown and urbanized, Canadians have urged their leaders to address congestion, in terms of both commute times and contribution to the broader community. These unprecedented investments in urban mobility are prudent as they spur environmental, economic, and public health benefits in Canadian communities. The current commitment to transit in the investing in Canada plan equals nearly $28 billion in long-term, dedicated funding from 2016 to 2028. CUTA and our member transit systems strongly support this program, and we firmly believe these historic investments should be conducted in a timely, responsible manner.

That's why I'm very pleased to be able to speak before you today to discuss some of the challenges and opportunities in the transit sector when it comes to deploying the government's infrastructure investments. According to Infrastructure Canada's website, there are already more than 1,100 transit projects funded through the public transit infrastructure fund. I don't have time to list them all, but I'll highlight a few projects that are typical of the program.

Federal investments have ranged from rehabilitating Montreal's iconic subway system, to upgrading the ferry service in Halifax, to helping develop a bus rapid transit system in Saskatoon. They've helped plan new rail projects in Ottawa, Calgary, Toronto, and Edmonton, just to name a few. The funding has also delivered significant benefit for transit in smaller communities. The fund invested in everything from bike racks in Airdrie, to new accessible buses in Whitehorse, to transit shelters in Trois-Rivières.

When it comes to the slower than expected federal spending of infrastructure funds, CUTA has identified three factors related to the public transit infrastructure fund that we believe contribute to the issue. The first contributing factor CUTA has identified involves an issue around perception, mainly a disconnect between what people in Ottawa believe is happening when they look at budget tables and what's actually happening on the ground. The announcement of dedicated, long-term funding in the 2016 federal budget was the impetus for thousands of new transit projects, but it takes time to properly plan, procure, construct, and operationalize these transit projects. This is the nature of our industry.

Environmental assessments, community consultations, urban planning, and other forms of due diligence are all vitally important to the success of transit investments, but it takes time to accomplish them. Though money is leaving federal coffers at a pace slower than expected, the work is still taking place on the ground.

The second factor has to do with how the federal government funds its transit projects. Project proponents receive federal funding only after the work has been completed. The federal government refunds invoices at the rate of the federal project cost-share, usually 40% to 50%. This slows federal funding considerably and stretches the commitment over a longer period of time.

The final factor that CUTA has identified has to do with timelines included in the public transit infrastructure fund. The program was created to span three years, and it funded nearly every transit system in the country. We heard from our members, though, that the need to complete projects before the program expired in 2019 did create a bottleneck in procuring goods for the transit industry. This included buses, transit shelters, and even services like transit planning. CUTA brought our concerns about this deadline to Infrastructure Canada and a one-year extension to the program was ultimately granted, which alleviated much of that pressure.

We appreciate the focus the government has placed on transit infrastructure and look forward to the results of this strategy.

Merci beaucoup. I look forward to answering your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go on to Ms. De Silva.

[Jan De Silva, President and Chief Executive Officer, Toronto Region Board of Trade]

Bonjour. Good afternoon, everyone. Thanks for inviting me here today.

As has been mentioned, I'm President and CEO of the Toronto Region Board of Trade, but I'm also this year's chair of the Canadian Global Cities Council, or CGCC for short. This is a coalition of the chambers of commerce of the eight largest metro regions in Canada. We've come together to focus on issues of international and domestic competitiveness as they pertain to our economies. Collectively, we represent 52% of the country's GDP, more than half of the country's population, and 65% of the country's workforce. Our focus is very much on how we can help our city regions continue to thrive as economic drivers for the national economy.

The challenges in city regions, particularly on infrastructure, can have national consequences. For example, delayed goods shipments in the Toronto-Waterloo region cost $650 million per year in higher prices of goods for consumers nationally.

To address these challenges, we spoke with many of you earlier this year about our latest report calling for a national urban strategy. In that report, we called for a national shift in how Canada supports and finances city region infrastructure. Our vision would lead to three broad policy changes.

First, the federal government could shift its role from due diligence in projects to instead measuring infrastructure outcomes, consistent with the approach used by national infrastructure agencies in several leading OECD countries, and should designate a central agency to inventory existing and required urban infrastructure.

Second, city and city-region leaders should lead the development of long-range priority plans for urban infrastructure. I'd be happy to discuss how that could work in our Q & A time.

Third, federal funding for urban priorities like infrastructure should fund the plan with direct grants rather than funding projects or programs over time. Like Montreal's REM, this would give cities and city-regions more flexibility to substitute federal, agency, pension investments, or other revenues for the municipal share of costs.

To be clear, the CGCC applauds the government's focus on infrastructure renewal, whether it is efforts to increase the federal funding ratio to support projects, support for cities that are facing a housing crisis, or setting up the framework for world-class projects through the Canada infrastructure bank. Progress is being made.

The old funding models are broken. Currently we're in a situation where Ottawa commits money and then wonders why dollars aren't spent more quickly. Everyone reports back that it's because not enough projects are shovel-ready. Our approach recognizes the complexity of urban infrastructure. It would allow cities to apply federal funding to different stages in the process as needed to fix this.

That's why we're proposing a different urban strategy, not to exclude or forget rural infrastructure, but to adopt the funding model to meet the needs of unique urban circumstances across the country.

Our report offers a path forward toward a faster, more targeted, better prioritized, and more financially sustainable infrastructure model. We need to move quickly. The right infrastructure will ensure our cities remain competitive as places to live and work. Without it, we risk falling further behind our peers in Europe and Asia who are investing much more and doing it more quickly to stay in the top global tier of competitive urban economies.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. De Silva.

We'll go on to Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Madam Chair; and thank you to all our witnesses for their opening testimony.

I want to talk about the issue of lapsed money. Last month, in his report, the PBO said that federal infrastructure spending over the past year created a maximum of 11,000 new jobs and added 0.1% to Canada's GDP, which falls well short of the government's own projections when it estimated what infrastructure would contribute to the economy and job creation. It's also consistent with the fact that a lot of spending has lapsed and the monies that were committed to have not been spent.

The PBO also highlighted his concern that the money that has lapsed and has been re-profiled is going to be eaten away through inflation over the next decade as inflation starts to tick up and central banks start to tighten. That's the context in which we're here.

I read through some of the Toronto Board of Trade reports in recent years. I noted that you concluded in your most recent report, “Toronto as a Global City: Scorecard on Prosperity”, “Finally, underinvestment in infrastructure, particularly in and around the Toronto region, is a chronic problem for Canada.”

Maybe you could speak a little to this committee about the implications of lapsed funding and the need to address ever-increasing commuting times for the millions of people who live in the GTA, ever-increasing frustration for distribution and logistics companies, ever-increasing frustration for SMEs that are looking to locate in the region, and how this is having a real-life impact on our ability to grow the economy and prosperity.

[Jan De Silva]

Certainly. I'm happy to address that.

First, as it pertains to lapsed funding, one of the biggest challenges we are seeing is the time it takes for projects to get far enough along the queue to access that funding. An approach such as the one we're proposing, enabling the city regions to have access to the funding at different stages rather than waiting until the later stages, would enable us to get more projects under way.

As it pertains to job creation, we actually did a study looking at Toronto, not at some of the other municipalities. For the infrastructure projects that have been approved in the Toronto region, we mapped out the jobs that would be generated. It's 146,000 jobs over the next 10 years, half in the trades and half in professional services related to these infrastructure projects.

The challenge we have, however, is that there are some barriers in getting students streamed into those opportunities. Those are things we're dealing with at the provincial level.

For instance, our apprenticeship models are quite restrictive. Half the kids who pursue careers in the trades are unable to get apprenticeships, so they're unable to get those positions. We have engineering firms and professional services firms saying they're going into high schools to talk to grade 9 or 10 students about careers in those fields.

From the feedback we've received from our members, some of it is a supply of talent, and some of it is just the timing, sequencing, and flow of funds.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

One of the things mentioned in your report was that the economy of southern Ontario, in particular the greater Toronto area, the greater Golden Horseshoe, hasn't rebounded with exports as strongly as we expected with the decline in the dollar and the growth in the American economy.

You highlighted that one of the things holding back SMEs is a lack of transportation infrastructure. You've made a comparison in your report to the transportation infrastructure in places such as Switzerland, where SMEs are growing and exporting around the world, and you concluded that it's an underinvestment in this transportation infrastructure that's really holding back growth in the greater Golden Horseshoe.

[Jan De Silva]

Yes.

We did a series of reports last year on the movement of goods in the Toronto-Waterloo corridor. As you're aware, the corridor was recently awarded one of the supercluster initiative bids for advanced manufacturing, because we have density of manufacturing and technology happening in that corridor.

For that corridor to succeed as a centre of advanced manufacturing, movement of goods is a critical issue. We've mapped out the flow of freight throughout the region. It's riddled with bottlenecks, because a lot of the infrastructure for moving freight is the network of 400-series highways, built from the 1950s to 1970s, designed for the movement of people and goods. We now have too many goods and too many people trying to use the same channels.

It is a critical issue that impacts trade: it impacts our ability to get to market. You have organizations such as GM that are manufacturing in Oshawa, on the east side of the city, that are having very strong difficulty getting just-in-time parts to their plant from the U.S. border. It is an issue that has an impact on the economy, our manufacturing capability, and our ability to be fully integrated into the supply chain with the U.S.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Sikand.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you, Madam Chair.

My question is directed to Wendy. I am going to mind my time, as I'm sharing it with my colleague.

As my riding name—Mississauga-Streetsville—suggests, I'm one of the MPs from Mississauga. It is the sixth-largest city in Canada, second in the GTA. According to the 2016 census, we have 721,000 people. Securing funding is of high priority. I was very pleased that we had the announcement of nearly $339 million for public transit.

I believe the Canadian Urban Transit Association projects ridership of transit operating systems and relays these estimates to the government for review. Could you please tell the committee a little bit more about how you perform this research of ridership projection?

[Wendy Reuter]

Certainly, I'd be happy to—and Mississauga is also close to my home; I understand how quickly it's grown.

CUTA's been providing data services into the transit industry for decades. It's part of the service that we offer our members. Our members essentially contribute data into the CUTA data program on an annual basis. CUTA helps make the definitions about the information that's gathered and helps them understand what type of information needs to be provided. Essentially, the information is brought back out to the members, and they use this to help understand and benchmark against other systems. It's been an annual process of gathering ridership as well as other operating data for almost as long as CUTA's been around.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

This might be a little obvious, but why is it important to know the ridership projections?

[Wendy Reuter]

Certainly, as we think about ridership being tied to funding, it's important from an economic perspective. It's important to understand it from a utility perspective, where it is providing service. Ridership has been used as an indicator of demand for some time. However, it's not the only measure of benefit. It's of benefit to the users, but transit provides many more community benefits, from reducing congestion to reducing greenhouse gases to contributing to public health.

While ridership has been a key measure of utility, it's not the only measure of the success of a transit system in a community.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Fragiskatos.

[Peter Fragiskatos, Liberal, London North Centre, ON]

In that vein, Ms. Reuter, I want to follow that up by saying I think that model, the approach that emphasizes ridership, is tremendously beneficial. Not only do large communities receive funding for transit, but so do medium-sized communities such as London, Ontario. I am one of the three MPs in the House of Commons representing London, which receives very sizable allocations. Just last month, London received its largest-ever funding commitment, and it's for transit—$204 million. The city is buzzing with excitement. There's no specific transit plan that is being funded at this time, because the city has yet to submit its business case for review and analysis, but there is an overwhelming consensus that we need better transit in the city. It is models like this that have allowed our city to receive its largest-ever funding commitment. I came to Ottawa in part to fight for better transit, and this makes it possible.

Under the previous government, Mr. Harper argued under what he called open federalism that the federal government should back away from infrastructure and put it in the hands of provinces. He reformed that view a bit later on, but generally that's the view he was wedded to at the outset.

The federal government is funding infrastructure up to 60% in small communities, and 40% for other projects, including transit. If we were to step back rather than step forward and embrace the idea that we have a real role to play, if municipalities were forced to really rely on the provinces for transit, what would that mean for municipalities? I don't think London's $204 million would have happened.